IFM manager says adapting products to the market needs is crucial to success.

Bob Vavra, Content Manager, CFE Media U.S.

04/26/2012

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When IFM first set foot in China, in 2005, it opened one office in Shanghai. Now those footprints are everywhere in China, with offices in 16 cities and a continued expansion into the western parts of the nation.

In doing so, they have captured the attention of Chinese companies and foreign investors in China looking to grow with the nation’s evolving needs for consumer goods and infrastructure improvements. Frank Spitzer, export sales manager for IFM Electronics, notes the benefits for Chinese manufacturing extend far beyond the products themselves.

As manufacturers come into China, they bring with them international standards,” said Spitzer. “And as Chinese companies hope to match the quality of automation for export, it means they must make sensors to fulfill European or American machine guidelines.

With its own mix of Chinese companies and international companies coming to China, Spitzer sees this convergence of standards having benefit for everyone involved. Global companies can important standards and Chinese exports will increase in quality, a concern cited by Chinese premier Wen Jiabao during his address at the opening ceremonies of the 2012 Hannover Messe, where China was the partner nation.

“ ‘Made in China’ products are generally at the medium and low rungs of the international industrial chain, and have a long way to go to catch up with the advanced level,” Wen said.

Spitzer sees a big opportunity for Chinese manufacturers because of this new attention to standards. “You can see the overall development of our business with the number of new locations over the past two years,” he said. “Process industries like food and beverage are quite exciting. The Chinese consumer is adopting Western lifestyles, especially in the packaged food industry, and that’s where we do very well. More plants need more machines, a safer process and higher quality. That makes it quite interesting. On the discrete side, there has been an increase of foreign investment in infrastructure equipment, especially John Deere and Caterpillar building new plants in China for earth moving. Volkswagen, which opened a new U.S. plant in Chattanooga, Tenn. in 2011, also has plans for a sixth China plant. “There are some good growth opportunities, especially with new infrastructure. More companies will come,” said Spitzer.

IFM’s automation solutions address two issues. The obvious is the needed growth in productivity, safety and quality. A less known benefit is the way the automation helps combat the growing skilled worker shortage in China, and Asia as a whole. “There’s a shortage of certain people, and labor costs are rising 15-17% in some areas,” Spitzer said. “The Chinese customers are calling for more wire installation savings for the installation of a system. We are getting a lot of interest in wireless. Chinese call for more automation wire saving installation system. We get a lot of interest in wireless.

“If you are able to offer intelligent systems, you can shorten the installation time, and at the end of day, you also will save some skilled workers and free them from unnecessary work,” he added. “IFM’s condition-based maintenance is easing the mind of maintenance people. It is raising the machine uptime.”

Spitzer sees India can be the next areas of explosive growth in the region – the “next China” in his words – once it overcomes its infrastructure challenges. “In terms of infrastructure and automation, they’re still 10-12 years behind, but their best is yet to come, he said. “It is a very fast-developing market. We see the progress they are doing. The quality of their automation is changing, and their safety technology also is changing.”

Adapting to the markets, Spitzer said, includes adapting product and solution offerings to meet the needs of that evolving market. “Have to adapt your product to the market needs,” he said. “If you are waiting for the Indian market to adapt to your product, won't be successful. You have to understand the market. The stronghold of IFM is its deep understanding of the needs of the market."